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The Resource Curse and Leif Wenar’s “Clean Hands Trust”

Leif Wenar has written a brilliant essay which explains both how we are currently harming the world’s poor and how we might go about righting this wrong. Although he does not use this analogy, his analysis implies that dictators are morally tantamount to slave owners, and those who buy natural resources from them are morally tantamount to merchants who trade guns for cheap, slave-produced cotton. If one buys oil from the political regime in Khartoum, for instance, these funds enable the regime to buy weapons with which it can strengthen its illegitimate stranglehold over the Sudanese people. In recognition of this, the U.S. government has prohibited American companies from trading with the Khartoum regime.

This prohibition is to be applauded, but it is not enough. Problems remain because Americans buy cheap products from China, which is able to produce these goods so cheaply in part because it buys oil from the Khartoun regime. Thus, while we in America may not be dealing directly with the dictators, we are morally tantamount to someone who buys cheap shirts from a merchant who buys cotton from slave owners.

The solution to this problem may seem obvious: Stop buying these shirts. Indeed, if the American government has realized since 1997 that it is morally impermissible to buy oil from the Khartoum regime, then it would for the same reasons appear just as wrong to buy products from countries like China who build products with, among other things, oil purchased from this illegitimate government. Upon closer inspection, however, this may be easier said than done. The problem is that in the current context it is not merely shirts which are morally tainted. The morally polluted products are neither rare nor clearly marked. As Wenar puts it,

Stolen Sudanese oil today percolates through the Chinese economy, becoming part of the Chinese imports that Americans buy every day. Americans right now can’t help dirtying their hands with stolen Sudanese oil when they shop at Target and Best Buy.

Assuming that Wenar is right (as I think he is) to suppose that it would be extremely difficult, if not impossible, to exist today without sullying one’s hands, it is of no use simply to tell Americans to keep their hands clean; we need to find a way to wash the dirt off. Wenar thus recommends what he labels a “Clean Hands Trust.” The basic idea of this Trust is to find a way to pay the Sudanese people a fair price for the oil that Americans are indirectly using. Thus, if China buys $3 billion worth of oil from the regime in Khartoum, the United States should place tariffs on Chinese imports until they have raised this amount of money, which should then be returned to the Sudanese people.

Here one might object that this requires too much of the American people. After all, not all of the oil China buys will be used in the creation of exports, and not all of its exports will be purchased by America. If only half of the morally tainted oil is dedicated to the production of exports, for instance, and then only half of these exports are purchased by Americans, then it would seem that Americans need only pay $750 million to clean their hands. Continuing the tariffs after the $750 million has been raised would amount essentially to taxing Americans for the sins of the Chinese and the other importers of Chinese products.

Although I think this is a legitimate complaint, I will not press it any further here for two reasons. First, I see no reason why Wenar could not design a slightly more sophisticated Clean Hands Trust which could adequately address these types of worries. Second and more important, I think the real worry is that Wenar’s proposal requires too LITTLE, not too much. To motivate this objection, let us return to the slave analogy I invoked above.

I take it for granted that it is wrong to own slaves, wrong to buy cotton that is inexpensive only because it was picked by slaves, and wrong to buy shirts that are inexpensive only because they were made from this morally polluted cotton. This much seems obvious. But now suppose that the slave owner wanted to right her wrong. Could she satisfactorily clean her hands by subsequently paying her slave for all of the cotton he picked? Could she fully right her wrong by paying the slave enough money to compensate him for twenty years of slave labor? I do not think so.

I concede that the slave owner is morally obligated to make reparations to the slave, but I deny that this would be sufficient to clean the slave owner’s hands. To see why, imagine that the slave owner is exceptionally rich. If a slave owner could effectively right the wrong of twenty years of slavery by paying her slave, say, $4 million, then the slave owner would presumably be morally entitled to choose between paying this $4 million now, or keeping the slave in bondage for another five years and then paying him $5 million. After all, if we suppose that the wrong of slavery can be righted at the cost of $200,000 per year, then the slave owner is well within her rights to continue the enslavement, as long as she pays accordingly after the fact. But surely this is wrong. Presumably the slave owner is morally required to free the slave immediately, no matter how rich she is, and no matter how much money she is willing to pay in reparations in the future. If so, then this shows that compensating the slave after the fact is not enough to clean one’s hands of the sin of slavery.

But notice. If the slave owner cannot clean her hands by paying the slave after the fact, then why should we presume that the person who buys slave-produced cotton from a slave owner can clean her hands by paying the slave after the fact? And if the person who buys morally tainted cotton cannot clean her hands in this way, why think that those who buy inexpensive shirts constructed from slave-produced cotton can clean their hands by subsequently reimbursing the slaves? Thus, while I do not deny that something like Wenar’s trust would be necessary to compensate the Sudanese people for our part in stealing their oil, I am not yet convinced that it would be enough to clean our American hands.

While I have tried to raise some questions about Wenar’s Clean Hands Trust, I would like to close by emphasizing how impressed I am with his proposal. The world is a better place than it might otherwise be because the United States government currently prohibits American companies from trading with the Khartoum regime, and the world would be a much better place still if we went a step further and followed Wenar’s insightful and constructive advice.

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Christopher “Kit” Wellman is an associate professor of philosophy at Washington University, St. Louis.

Also from This Issue

Developing countries with massive oil or mineral reserves are often wracked by corruption and strife as their would-be rulers jockey for control of the resources that can make them immensely wealthy. But these resources, argues political philosopher Leif Wenar in this month’s provocative lead essay, belong to the people of these countries – some of the poorest people in the world – not their rulers. So trade in these resources amounts to trade in stolen goods. Wenar argues that we must “enforce property rights directly” by taking “legal action in U.S. jurisdictions against the middlemen who trade Americans’ dollars to the worst regimes in exchange for stolen resources.” Because this cannot stop “resource cursed” countries from trading with less enlightened countries, such as China, Wenar additionally proposes a tariff on imports from China (or from whatever country is receiving “stolen” resources), the proceeds of which are to be held in trust for the rightful owners of the resources, and disbursed to those people in the event of their government’s reform. “The priority in reforming global trade,” Wenar argues, “must be to lock in the rights that define the market order. The first step in improving the prospects of poor people is to enforce the rights they already have.”

While lauding the goal of Leif Wenar’s proposal for fighting the effects of the resource curse, John Ghazvinian, author of Untapped: The Scramble for Africa’s Oil, questions its practicability. When it comes to determining which governments meet the threshold of a “minimally decent and unified government,” Ghazvinian worries about the possibility that “this process will become deeply politicized” or “simply reduced to who has the best PR apparatus.” Ghazvinian suggests that requiring a government to be unified, though intended to stave off civil war, may “have the opposite effect” by providing “any aggrieved minority the power of an instant veto-risking destabilization in what are often already unstable countries.” Wenar’s “anti-theft” tariff, Ghazvinian argues, seems unlikely really to be seen as distinct from other tariffs and so will introduce just another complicating factor into the realpolitik of trade negotiation.

Cato senior fellow Andrei Illarionov, a former chief economic advisor to then-Russian President Vladimir Putin, argues that there is nothing special about the “resource curse,” which represents just one among many kinds of theft by corrupt political elites. According to Illarionov, Wenar fails to make a principled distinction between the actions of the political leaders of Equatorial Guinea and those of Russia that would motivate restricting trade in goods from the former but not the latter. Illarionov argues that the precedent of treating a country’s natural resources as belonging to its people is the problem, not the beginning of a solution. In practical political reality, the idea of collective national ownership of resources often translates directly into nationalization and control by political elites. Additionally, Illarionov argues that the trade sanctions Wenar proposes would punish innocent citizens who already suffer under corrupt rulers. The issue, he argues, is not a matter of what is stolen, but how we will treat those responsible for theft.

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